10. Stockholders' Equity

On December 27, 2016, the Company established
a new series of preferred stock, Series B Convertible Preferred Stock. The shares, as a series, are entitled to dividends as declared
by the board of directors in an amount equal to $1.00 (in the aggregate for all then-issued and outstanding shares of Series B
Convertible Preferred Stock). The series does not have any redemption rights or Stock basis, except as otherwise required by the
Nevada Revised Statutes. The series does not provide for any specific allocation of seats on the Board of Directors. At any time
and from time to time, the shares of Series B Convertible Preferred Stock are convertible into shares of common stock at a ratio
of one share of Series B Preferred Stock into five shares of common stock, subject to equitable adjustment in the event of forward
stock splits and reverse stock splits.

The holders of shares of the Series B Convertible
Stock have agreed not to sell transfer, assign, hypothecate, pledge, margin, hedge, trade, or otherwise obtain or attempt to obtain
any economic value from any of such shares or any shares into which they may be converted (e.g., common stock) or for which they
may be exchanged. This “lockup” agreement expires on December 31, 2021. Our Warrant Agreements with ICG have been amended
to provide that the shares underlying those warrants are exercisable into shares of Series B Convertible Preferred Stock, which
warrant shares are also subject to the same “lockup” agreement as the currently outstanding shares of Series B Convertible
Preferred Stock.

During the nine months ended June 30, 2018,
the Company did not issue any shares of Series B Convertible Preferred Stock.

During the nine months ended June 30, 2017,
the Company issued:

55,888 shares of Series B Convertible Preferred
Stock to Kingston Diversified Holdings LLC on December 29, 2016 to settle and pay for an outstanding accrued liability in the amount
of $2,800,000. The 55,888 shares of Series B Convertible Preferred Stock issued are convertible at an exchange ratio of (five)
shares of common stock for each share of Series B Convertible Preferred Stock, or 279,440 shares of common stock.

158,356 shares of Series B Convertible Preferred
Stock were issued to ICG on December 27, 2016 in exchange for 791,758 shares of our common stock at an exchange ratio of five shares
of common stock for each share of Series B Convertible Preferred Stock.

Series E Convertible Preferred Stock

As of June 30, 2018, there were 127,840 shares
of Series E Convertible Preferred Stock and 77,840 shares outstanding. The shares accrue dividends at the rate of 5% per annum
on the liquidation preference per share, payable quarterly from legally available funds. The shares carry a cash liquidation preference
of $0.30 per share, plus any accrued but unpaid dividends. If such funds are not available, dividends shall continue to accumulate
until they can be paid from legally available funds. Holders of the preferred shares are entitled, after two years from issuance,
to convert them into shares of our common stock on a one-to-one basis together with payment of $85.50 per converted share. On November
18, 2017, the Company repurchased 50,000 shares of Series E Convertible Preferred Stock for an aggregate purchase price of $4,000.

Series E Convertible Preferred Stock Dividends

During the nine months ended June 30, 2018 and
June 30, 2017, the Company accrued dividends of $876 and $1,438, respectively, payable to holders of Series E preferred stock.
As of June 30, 2018, and September 30, 2017, unpaid dividends were $876 and $959, respectively.

Common Stock

On November 22, 2016, the Company’s board
of directors authorized a one-for-six (1:6) reverse stock split and a contemporaneous one-for-six (1:6) reduction in the number
of authorized shares of common stock from 60,000,000 to 10,000,000 shares, to take effect for stockholders of record as of December
5, 2016. No fractional shares were issued. All share, option and warrant related information presented in these financial statements
and footnotes has been retroactively adjusted to reflect the decreased number of shares resulting in this action.

During the nine months ended June 30, 2018,
the Company did not issue any shares of common stock.

During the nine months ended June 30, 2017,
the Company issued:

58,333 shares of common stock to Novalk Apps
S.A.S. on December 28, 2016 to settle and pay for an outstanding accrued liability in the amount of $584,500. The value was based
on the market value of the Company’s common stock on the date of issuance.

2,284 shares of common stock to various holders
of fractional shares of the Company’s common stock pursuant to the 1:6 stock split effective for stockholders of record on
December 5, 2016. All fractional shares of the Company’s common stock were eliminated.

Treasury Stock

For the year ended September 30, 2017, the Company
purchased a total of 96,307 shares of its common stock in the open market (treasury shares) over a two-year period, for $999,584.
For the nine months ended June 30, 2018, the Company purchased 31,820 additional shares of its common stock in the open market
(treasury shares) for $402,328. The Company accounted for the purchase of these treasury shares using the cost method. Treasury
shares held by the Company as of June 30, 2018 are 128,127 common shares for a cost of $1,401,912.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.